Seven is the odd man out in TV land - but for how long?

By John McDuling & Jennifer Duke

As Australia's commercial TV industry enters its annual 'Upfronts' season, where broadcasters showcase their programming for the year ahead to advertisers, the spectre of corporate dealmaking remains.

While Nine is preparing to finalise a deal to acquire Fairfax Media (publisher of this website) and Ten is adjusting to life under ownership of American giant CBS, Kerry Stokes-controlled Seven remains the odd man out. The question is - for how much longer?

Kerry Stokes and his Seven media empire has been the odd one out in recent deals.

Nine chairman Peter Costello and Fairfax chairman Nick Falloon were sitting next to each other at the broadcaster's Upfronts event in Sydney on Wednesday evening- a sign of solidarity, perhaps, amid renewed questioning of their deal.

But if a few things fell differently, it might have been Stokes sitting next to Falloon at Seven's event next week.

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It is well known that Seven and Fairfax held talks with each other about a possible combination last year after changes to cross-media ownership laws, before Fairfax and Nine decided to unite.

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Yet just how close they came to agreeing a tie-up has not really been revealed. The two companies were in advanced talks over a merger that would have been just as historic but changed the Australian media landscape in different ways.

Under the arrangement, Seven Group Holdings (the diversified parent company of the TV broadcaster Seven West Media) would have retained a stake of about 15 per cent in the combined company, down from 40 per cent currently.

Seven was being advised by UBS and its star banker Matt Grounds, and Fairfax by Macquarie (which advised it on the Nine deal).

Seven West Media was linked with News Corp earlier this year, now industry rumours have linked it again with other US media companies. Even if they don't turn out to be true, it does show how much attention is on the company.

The talks with Fairfax fell apart, with concerns from the publisher's side about Seven's debt load and its paucity of digital assets. Nine's share price then took off, enabling it to pursue a scrip heavy bid for Fairfax, and the rest is history.

Sources say after Fairfax talks collapsed, Seven (Stokes) and its advisers explored selling the media business to possible buyers in the US - with NBC, owned by Comcast, mentioned as one name that was targeted.

And it was name mentioned again this week. Comcast, its parent company is in the process of expanding internationally, outbid majority shareholder Rupert Murdoch's 21st Century Fox for UK pay TV business Sky.

Whether it would really be interested in continuing that expansion all the way to Australia is unclear. But the media industry loves a rumour.

Seven Group chief executive Ryan Stokes is known as having no emotional attachment to mediaCredit:Not for syndication

Ryan Stokes is described by sources as a dispassionate trader of assets, with no emotional attachment to media. His father sees the world differently, but also loves a deal.

For the record, Seven declined to comment on speculation. Well-placed sources at Seven said they were not aware of any interest. And Comcast couldn't be reached for comment.

Citi analyst David Kaynes said in a note this week that the "benefit to Fairfax shareholders of voting in favour of the merger is less obvious, and we are no longer confident that this will proceed under the current agreed terms".

"If you agree to a deal that pays you less than what you think [a company's] worth it doesn't make sense," he later told this website.

He told advertisers and media buyers at the annual Upfront event on Wednesday evening that the “combined Nine-Fairfax group will provide a scale and unparalleled breadth of platforms across television, radio, digital and print media”.

“Delivering content that will be recognised for its diversity, quality and recognition that indeed one media company can serve a number of audiences,” Mr Marks said.

“Meaning we can build more powerful content partnerships, co-ordinated across all platforms.”